LONDON (ShareCast) - (Sharecast News) - Citigroup has slashed its target price for Entain by nearly a third after the gambling company's disappointing third-quarter update this week, but remained broadly positive on the stock.
Entain, which owns brands like Ladbrokes, Coral and Sportingbet, said on Monday that pro forma net gaming revenues (NGR) are expected to be down by a "high single digit percent" in the third quarter due to adverse sporting results, regulatory headwinds and a slower-than-expected performance in Australia and Italy.

As a result, full-year online NGR would be see a "low single digit percent" decline, compared with earlier guidance of "low to mid single digit" growth. However, the company maintained its full-year EBITDA guidance of £1.0-1.05bn.

Despite cutting its forecasts and its target price from 2,200p to 1,600p, Citigroup kept a 'buy' rating on the stock

"Entain's online performance has been consistently strong, with its online division delivering a 30% EBITDA compound annual growth rate [during] 2019-21, offsetting much of the impact of retail pandemic-related lockdown," the bank said. "We think its online expertise will translate into US market dominance."

The stock was more or less flat at 947.2p by midday on Wednesday, having fallen 10.5% over the past two days.

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